Abolition of 457 work visas: what it means for business

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The Federal Government’s decision this week to abolish 457 work visas and replace with a new Temporary Skill Shortage (TSS) visa has created uncertainty and confusion for both businesses and individuals directly impacted by the changes.

While the current visa status of existing Subclass 457 visa holders in Australia remains unaffected by these changes, employers will need to be aware of how these changes impact on all new (and unfinalised) Subclass 457 visa applications going forward.

In addition, employers will also need to consider their 457 visa holders’ eligibility to qualify for the new TSS visa or for company sponsored permanent residence. The key changes taking effect are:

From 19 April 2017:

All new 457 visas will be granted with either a 2 or 4 year visa validity depending on the nominated occupation.

200 occupations have been removed from the list of occupations previously available for nomination by employers.

In addition, a further 16 occupations including certain key engineering occupations (including industrial engineers, production or plant engineers and electronics engineers) have been restricted from being nominated under the program.

From 1 July 2017:

English language salary exemption threshold removed.

Policy settings about the training benchmark requirement will be made clearer in legislative instruments.

Publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation by DIBP will commence.

From March 2018:

The Subclass 457 visa will be abolished altogether and replaced with a new TSS visa with specified Short and Medium term streams.

Labour Market Testing will be mandatory unless exempt due to international trade obligations. Similar criteria to the post 18 April 457 visa changes will apply.

The aforementioned changes will significantly impact businesses that require access to the 457 visa program, particularly businesses that can no longer sponsor highly experienced specialist personnel in certain key occupations which have been removed from the eligible occupation lists. Alternative pathways to access these specialist personnel (such as Labour Agreements where possible) may need to be given due consideration, however, these programs are often difficult to access.

KPMG’s Immigration Services team has been active in the media providing commentary on these changes and working with our clients to minimise the impacts of these changes. Our Migration Newsflash outlines more.